If you take the view that few if any of Trump's proposals will play out as hoped, Fehr recommends a defensive positioning, with a heavy weighting to bonds and large - capitalization, high -
yielding stocks such as telecoms, utilities and consumer staples.
High
yielding stocks such as REITS will help to pay those bills that are falling into your post box.
Not exact matches
Appetite for riskier assets
such as
stocks and high -
yield bonds has been suppressed by a number of factors that have come up around the same time, but the headwinds may be transitory, according to the New York - based investment bank.
The earnings
yield on enormous blue - chip
stocks such as Wal - Mart, which had little chance to grow at historical rates due to sheer size, was a paltry 2.54 % compared to the 5.49 % you could get holding long - term Treasury bonds.
Investors have long known that a high - dividend strategy has been subject to various «
yield traps,»
such as those stemming from temporarily high earnings, high payouts or falling
stock prices.
Japan's Nikkei share average edged lower on Monday morning after index - heavy
stocks such as SoftBank and Terumo lost ground, offsetting gains in financial
stocks, which rallied after U.S.
yields rose.
Japan's Nikkei share average fell on Monday as index heavyweight
stocks such as SoftBank and Terumo lost ground, offsetting gains in financials, which rallied after U.S.
yields rose.
For
stocks, it's important to have
stocks in your portfolio from a large variety of companies, including companies in different sectors or industries,
such as consumer staples or materials; from companies of different sizes,
such as large - cap or small - cap
stocks; from companies in different countries and from companies that either have growth potential or good dividend
yields.
I still think there will be a flight to safety in sovereign bonds when
stocks have a bear market but other areas
such as high
yield and corporate debt could run into some problems.
As you can see in the chart below, one of the portfolio's strengths is the freedom it has to go beyond traditional sources of income and pursue nontraditional income sources —
such as ETF exposure to bank loans, preferred
stock, and emerging market debt — in order to seek
yield.
After a relentless search for
yield, investors have piled into dividend -
yielding, defensive
stocks, or what we call «bond market proxies,» making many
such segments extremely expensive.
To some extent,
stock market action also implies expectations for slower economic growth, though interest rate signals,
such as a flat
yield curve, are more suggestive of slow growth than
stock market action is, and we've yet to see a substantial widening of credit spreads that would suggest imminent recession.
High - dividend
stocks such as utilities and phone companies fell; those
stocks are often compared to bonds and they tend to fall when bond
yields rise, as higher bond
yields make the
stocks less appealing to investors seeking income.
True, but the
stocks with
such high
yields aren't likely to keep them for long.
Correlations between crude oil and other higher risk assets,
such as
stocks, emerging market assets and high
yield...
With treasury
yields well below 2 %, the
stock market exhibiting renewed volatility, and returns on cash non-existent, investors are also turning to alternatives
such as real estate, exchange traded funds, and energy commodities.
Goldman's base - case scenario calls for a 10 - year
yield of 3.25 percent by the end of 2018, though a «stress test» out to 4.5 percent indicates
such a move would cause
stocks to tumble, economist Daan Struyven wrote in a note Saturday.
With many high -
yield stocks also having defensive characteristics, some conservative investors like funds
such as the Vanguard ETF as a way of protecting against market downturns.
Higher oil prices would reinforce current market trends based on reflation: rising long - term bond
yields and a shift out of perceived safer assets — bond proxies and low - volatility
stocks — and into cyclical assets
such as EM.
So, investing in
stocks that have a good record of dividend growth may help toward beating the effect of inflation, but some current
yield may have to be sacrificed to benefit from
such future dividend growth.
If rates go higher,
stocks can hang in until
such time as we break the higher end of the
yield range.
This forced investors to seek income from «bond - surrogate» investments
such as high - dividend - paying
stocks, high -
yield bonds, levered loans and real estate.
We prefer value
stocks, those that look relatively cheap on metrics
such as book value and tend to perform well when bond
yields rise.
Non-asset holders were punished — their bank deposits now generate little or no income, and they were forced to move into riskier assets,
such as
stocks, bonds, real estate, or «anything that offers some
yield and is not bolted down to the floor» (please see my answer to What kind of market distortions does the Fed loaning out money at 0 % cause?).
In any case, investors should keep in mind that the
stock market's reaction to Fed cuts has historically been dependent on other conditions
such as valuations, economic expectations and the slope of the
yield curve.
Dividend
stocks currently
yield more than government bonds in major markets
such as Canada and may remain a valuable source of income even as interest rates slowly begin to rise south of the border.
It was observed that prices of other risk assets,
such as emerging market
stocks, high -
yield corporate bonds, and commercial real estate, had also risen significantly in recent months.»
Correlations between crude oil and other higher risk assets,
such as
stocks, emerging market assets and high
yield bonds, remain elevated.
Are bond market investors generally shrewder than their
stock market counterparts,
such that bond
yield tops (bottoms) anticipate
stock market bottoms (tops)?
He defines this ERP as the retrospective difference in 10 - year
yield between the broad U.S.
stock market and the 10 - year
yield on safe assets
such as U.S. Treasury bills or intermediate - term U.S. Treasury notes.
Typically, it connotes the purchase of
stocks having attributes
such as a low ratio of price to book value, a low price - earnings ratio, or a high dividend
yield.
Value
stocks: companies that appear to be underpriced based on a number of fundmental factors,
such as low price - to - earnings and price - to - book ratios or high dividend
yield
Profitability, costs of production, value of output and some partial productivity indicators (
such as milk
yield,
stocking density, cereal
yield, labour productivity) were examined in this study.
They include: high levels of degraded soils; reductions in irrigation quotas to restore the health of the Murray - Darling system; the re-forestation of some agricultural land to meet emissions reductions targets; the impacts of peak oil,
such as the diversion of food crops into feed -
stock for biofuels; and the price and crop
yield implications of peak phosphorous, given Australia's dependence on imported fertilisers.
Profitability, costs of production, value of output and some partial productivity indicators (
such as milk
yield,
stocking density, cereal -LSB-...]
«Our method of direct conversion of ethanol offers a pathway to produce suitable hydrocarbon blend -
stock that may be blended at a refinery to
yield fuels
such as gasoline, diesel and jet fuel or commodity chemicals,» Narula said.
Although recently rising prices for
stocks, high -
yield bonds, commodities and other riskier assets would suggest otherwise, investors remain skittish over the still unresolved and quite concerning risks facing financial markets,
such as the U.S. presidential election, the potentially prolonged post-Brexit renegotiations, Italian bank solvency and a slowing China.
Remember, as bond
yields rise, bond prices fall, as do the prices of bond proxies
such as utilities, REITs and other high -
yielding stocks.
Dividend
stocks currently
yield more than government bonds in major markets
such as Canada and may remain a valuable source of income even as interest rates slowly begin to rise south of the border.
The prospect of lower
stock returns and higher volatility going forward suggests for Russ that investors should consider strategies
such as carry, or
yield, to boost risk adjusted returns.
If I had invested in more safer
stocks (
such as the famed Dividend Aristocrats), then I would have lower
yields and it would have taken more time and / or capital to attain the kind of monthly dividend income I now have.
Correlations between crude oil and other higher risk assets,
such as
stocks, emerging market assets and high
yield bonds, remain elevated.
The positions the bloggers and commentary took against reinvesting dividends centered on whether the
stock price would be good at the time of the reinvestment; and it mentioned strategies like pulling the dividends out and either putting them into a high -
yield savings account or accumulating them until
such time there was enough to make a new investment into some other
stock or
stock fund.
One of the oldest tricks in the game is to offer a high current
yield, where the
yield can get curtailed through early prepayment (typically in low interest rate environments), or some negative event that forces the security to change its form,
such as when a
stock price falls with reverse convertibles.
It is better to load up on high -
yield, low beta
stocks such as Coca - Cola (NYSE: KO), Wal - Mart (NYSE: WMT), and others.
Carry trades have to be approached carefully and correlate with risk assets
such as
stocks and high -
yield bonds more broadly.
Stocks such as General Electric, Dow Chemical, Pfizer, and others are providing historically high
yields and associated downside protection.
Generally speaking, a
stock with
such massive dividend growth will come attached with the trade - off of offering a rather low
yield.
Consistently with the
stock holdings of the analyzed portfolio, the reference portfolio comprised large - cap equity ETFs,
such as the Guggenheim S&P 500 ® Top 50 ETF (XLG), PowerShares High
Yield Equity Dividend Achievers Portfolio (PEY), PowerShares Dividend Achievers Portfolio (PFM), and iShares Morningstar Large - Cap Value ETF (JKF).
In this case customers may consider taking on extra risk in exchange for better
yield with assets
such as annuities, long - term Treasury bonds or dividend - paying
stocks.